Strategic Alliance Agreement

Exhibit 10.16



STRATEGIC ALLIANCE AGREEMENT



This Strategic Alliance Agreement ("Agreement") is made and entered into as of September 21, 1999, by and between Quanta Services, Inc., a Delaware corporation ("Company") and UtiliCorp United Inc., a Delaware corporation ("UtiliCorp").





This Agreement is made pursuant to the Securities Purchase Agreement, dated as of September 21, 1999, by and between the Company and UtiliCorp ("Securities Purchase Agreement"). In order to provide mutual inducements to enter into the Securities Purchase Agreement in addition to those expressly stated in the Securities Purchase Agreement, the Company has agreed to use reasonable commercial efforts to provide certain services to UtiliCorp and UtiliCorp has agreed to use reasonable commercial efforts to contract with the Company for such services on the terms and conditions set forth in this Agreement. Pursuant to the Securities Purchase Agreement, UtiliCorp will acquire shares of the Company's Convertible Preferred Stock ("Preferred Stock") which will entitle UtiliCorp to convert the Preferred Stock into shares of Common Stock, par value $0.00001 per share, of the Company. The execution and delivery of this Agreement shall occur contemporaneously with the Closing (as defined in the Securities Purchase Agreement). Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed thereto in the Securities Purchase Agreement.





The parties agree as follows:



Section 1. Services to be Performed by the Company.



UtiliCorp will use the Company, subject to the Company's ability to perform services in designated locations, as a preferred contractor in outsourced transmission and distribution infrastructure construction and maintenance and natural gas distribution construction and maintenance in all areas serviced by UtiliCorp, provided that the Company provides such services at a competitive cost that is demonstrably equal to or better than current market rates for such services when the quality of the Company's services is considered. UtiliCorp and the Company will also discuss and explore the Company's potential purchase of other electric transmission and distribution and natural gas contractors owned by or affiliated with UtiliCorp and will negotiate in good faith with respect to proposed terms of acquisition in the event that UtiliCorp determines to dispose of any such contractors owned by or affiliated with UtiliCorp. In furtherance of these objectives, the parties agree that UtiliCorp shall regularly provide the Company the following to the extent pertinent to the provision of services pursuant to this Agreement:



(a) Evaluation of "value engineering" proposals;





(b) Recommendations for improvement and cost reduction between UtiliCorp,

its Affiliates and the Company; and



(c) Evaluations by UtiliCorp and its Affiliates of "value added" proposals

submitted by the Company and timely responses to inquiries or requests

for clarification or pertinent further documentation by the Company

related to any of the foregoing matters.



UtiliCorp and the Company acknowledge their mutual intent to facilitate communications between them in furtherance of the design, construction, maintenance, and timely and cost-effective completion of projects aimed at ensuring the high quality of the transmission and distribution systems of UtiliCorp and its Affiliates. In addition, UtiliCorp and the Company acknowledge the need to meet from time-to-time to evaluate each party's performance with respect to the objectives provided for in this Agreement.



Section 2. Mutual Access and Cooperation.



The parties hereto desire and agree to use their respective reasonable efforts to provide to the other party reasonable access from time-to-time to their respective representatives: (i) to discuss service capabilities, goals and informational requirements as outlined in Section 1 of this Agreement; (ii) to present for consideration by the other party proposals and opportunities for the provision of services pursuant hereto, (iii) for consultation with the other party regarding acquisition and investment opportunities within the scope of this Agreement or which would have a material effect upon the provision of services contemplated hereby, (iv) to discuss matters in which such party has, or may have, general expertise (which areas of expertise may include, without limitation, commodity trading, origination, engineering and the financial analysis, modeling and structuring of proposed transactions) and (v) otherwise to explore and evaluate ways in which the Company and UtiliCorp might work together to enhance their respective businesses.



In connection with the foregoing, the parties hereto shall, as appropriate, use reasonable efforts (i) to arrange meetings from time-to-time between their respective representatives to discuss such matters, (ii) to provide to the other party from time-to-time reasonable access to information pertinent to the objectives of this Agreement and (iii) to otherwise enhance cooperation and communication between UtiliCorp and its Affiliates on the one hand and the Company on the other hand to facilitate access to information and personnel, subject, however, to limitations imposed by applicable law and existing confidentiality obligations as well as internal policies regarding the maintenance of the confidentiality of proprietary data and other commercially sensitive information.



It is the intent of the parties to work cooperatively in connection with the foregoing towards the goal of mutually beneficial discussions, relations and transactions.





Section 3. Term.



This Agreement shall have a term of six (6) years, which can be extended at the mutual agreement of the parties. Each party hereto may during the existence of the arrangements between the Company and UtiliCorp engage in or have business relations with competitors of the other parties and/or their Affiliates.



Section 4. Protection of Employees.



From and after the date hereof until the date one (1) year after the term of this Agreement has expired, each party hereto shall not, and shall cause its respective wholly owned subsidiaries not to, solicit to employ any of the employees of the other party or its Affiliates with whom the soliciting party or its Affiliates had contact in connection with the transactions contemplated hereby; provided, however, that any such solicitation shall not be a breach of this Section if (i) the personnel who performed such solicitation have no knowledge of this Agreement or the transactions contemplated hereby and (ii) none of the soliciting party's (or any of its Affiliates') personnel who have knowledge of this Agreement or the transactions contemplated hereby have actual knowledge of any such solicitation. The term "solicit to employ" shall not be deemed to include general solicitations of employment not specifically directed towards employees of a party hereto or its Affiliates. ...